Keren Bobker, our consumer rights advocate, on the first steps a novice investor should take and solves a customer's home loan problem
Novice investors advised to seek professional help
I have been in Dubai for just under a year and have managed to save about Dh20,000, which I would like to invest. How should a beginner like me go about investing in the UAE? - NP Dubai
This is a question that does not have one simple answer because there are many issues to consider and everyone's situation and needs are different. The reader should start by finding an independent financial adviser who will have his long-term interests at heart. Check the adviser's experience, qualifications and reputation before dealing with them. NP has to consider the time frame, any other assets, accessibility required, level of risk he is willing to take and whether he is likely to have any personal tax liabilities - either on an ongoing basis or in the future. Before investing for the future, I believe it is essential that everyone builds up an easily accessible cash fund that can be used in case of emergency or redundancy. Once this has been set aside, longer-term investments can be considered. The options will initially be dictated by the length of time monies need not be touched, as well as the amount and level of investment risk. Whether it should be invested offshore is also a consideration. NP will have access to a number of savings accounts, bonds and regular premium savings plans, each with different advantages and disadvantages. These must also be considered in tandem with other financial planning issues such as wills and protection policies. He has sufficient money to start planning for his future, but must ensure that he receives advice that is beneficial to him.
I am employed by a Canadian company and have a contract of employment there. My job is based in Dubai and I have a "nominal" official Ministry of Labour contract that shows I'm employed by our sponsor and that I have a salary. The salary is shown as Dh20,000 per month - although my real salary is nearly double that, plus benefits. All costs are met by my employer. My employer trades in the UAE, but has no legal entity here and relies on our sponsor for support. I've worked in the UAE for seven years and I'm resigning this week. I believe that I am entitled to a gratuity from our sponsor as the contract is with him. The sponsor claims I signed a waiver on behalf of my employer that removes him from any financial liability. As I'm moving to another company, I've got no issues with upsetting my current employer. Can I claim a gratuity from my sponsor? NW Al Ain
NW has a UAE contract of employment and is entitled to receive a gratuity payment, although this will be based on the salary shown in the contract: Dh20,000. If, however, a disclaimer has been signed stating that he waives his right to receive a gratuity, that will be valid and no gratuity payment will be forthcoming. As to who is liable, that depends on who the contract is with. If it's with the sponsor, then technically he will be liable, although this depends on agreements and contracts.
I have a home loan with Ajman Bank, which was taken out at the beginning of this year and for which repayment is being made regularly. Recently, the bank contacted me to say that my original loan application was misplaced and it required me to sign a fresh application. I agreed and asked for a formal communication along with a filled-in application form. Although the form was sent, it has been dragging its feet on giving me anything in writing. The contention is that documenting my request could cost someone their job. How should I proceed? PK Dubai
This is an unusual situation. If the bank has mislaid the original paperwork, that is its concern and customers should not have to be contacted numerous times in this regard. It appears that mortgage payments have been collected properly and there have been no other problems. After a quick investigation, a spokesperson for Ajman Bank said: "As part of a routine portfolio and record update process, we noticed that some of the customer's personal information was not complete so we contacted him, as we regularly contact our other clients, for this purpose. All of the customer's original documents related to the finance home agreement are in our custody. Our contacting the customer on many occasions to receive the information was done as a matter of follow up that our bank representatives are trained to tackle professionally and to the highest standards. Against all good intentions, though, this seems to have obviously inconvenienced the customer, which we deeply regret. The matter has been investigated at the highest levels and we do apologise for any miscommunication that might have occurred on our bank representative's side." The bank confirmed that it did not require any further paperwork or information from PK.
Keren Bobker is an independent financial adviser with Holborn Assets in Dubai. Contact her at firstname.lastname@example.org